the new neoliberalism
in a july 2015 interview, the former Greek Finance Minister Yanis Varoufakis gave an insight into his exchanges with the representatives of Greece’s creditors at eu Finance Ministers’ meetings. What stood out was his depiction of almost surreal levels of incomprehension: ‘You put forward an argument that you’ve really worked on—to make sure it’s logically coherent—and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem.’footnote1 The promise of a common European public sphere, bound together by reasoned deliberation, which has enamoured liberals for over two hundred years, appears broken. The post-war reconstitution of this project, which placed the Common Market at its heart, has reached its limit, as many of its former enthusiasts now accept. Varoufakis’s comment is symptomatic of a new strain of political dissent that cannot be simply classed as critique. Rather, it is an expression of bewilderment that dominant forms of economic regulation persist, apparently impervious to evidence, evaluation or the merits of alternatives. Once critique is no longer even heard or recognized, critics may as well say anything.
One result of this seeming irrationalism from above has been the vindication of unreason from below. The British performance artist Mark McGowan, also known as ‘The Artist Taxi Driver’, exemplifies this in his YouTube videos. McGowan sits in his car in wrap-around shades, unleashing his fury at austerity measures, political elites, tax evaders and the senseless social harm that has been enacted since the financial crisis. As he gesticulates at the camera on his dashboard, the mood is one of disbelief, closer to hilarity than to despair, as if to ask: can this really be happening? One of The Artist Taxi Driver’s straplines was ‘This is not a recession, this is a robbery’. Allegations of illegal violence are common in this new culture of protest, as in the ubiquitous complaints that #thisisacoup, or Varoufakis’s memorable description of Greece’s debt conditions as ‘fiscal waterboarding’. In the us, The Onion and The Daily Show have long offered a model of satirical reporting on the political scene. The Daily Mash, a British website, has developed a more specific focus on economic nonsense, with articles such as ‘“Getting your name out there” to become legal tender’ or ‘Tories to build thousands of affordable second homes’. The proximity of these headlines to ‘real’ news effectively offers readers a choice of two stories, both equally absurd.
This seeming shift to unreason by the governing powers has been characterized since 2008 by more vindictive varieties of policymaking, which often operate outside of the norms of policy evaluation, evidence gathering or public appeal. In the past, neoliberalism has been criticized for elevating economic judgements of ‘efficiency’ or ‘competitiveness’ above moral judgements of social justice. But increasingly it appears, at least at the level of public discourse, that governments are operating outside of the norms of judgement altogether. The best example of this is austerity itself. History offers scant examples of pro-cyclical fiscal-contraction programmes that have succeeded in avoiding macroeconomic stagnation.footnote2 The hypothesis of ‘expansionary fiscal austerity’, put forward by Harvard economist Alberto Alesina and enthusiastically cited by a number of European political leaders since 2008, only ever proposed that spending cuts need not necessarily lead to reduced growth. Yet no amount of empirical evidence of austerity’s failings seems adequate to derail those who pronounce its necessity.
Social policies aimed at disciplining vulnerable populations have become equally unbelievable. Under Britain’s ‘benefit sanctions’ regime, welfare payments can be suddenly suspended for up to a month on account of trivial breaches, without any sense of procedural reason as to how the rules are applied. One man had a heart attack on the way to an appointment, but was nevertheless sanctioned; another lost his benefits for going to his brother’s funeral, having been unable to get through when he tried to phone the Job Centre. Over a million people in the uk have received sanctions for one reason or another. Thousands have died after being declared ‘fit for work’ by workfare contractors and having their disability benefits cut.footnote3 Labour-market policies now incorporate dubious behavioural activation techniques, from neuro-linguistic programming to self-marketing slogans. Participants must read out ‘affirmations’, such as ‘My only limitations are the ones I set for myself’, which are almost comically distant from the reality of those living with low incomes, chronic health conditions and dependent family members.
It might be argued that such policies are not beyond reason altogether. Austerity clearly has its beneficiaries in creditor states and financial institutions; harsh treatment for welfare recipients serves well-known electoral agendas. Yet these trends do seem to exist outside of public governmental reason. If Foucault was right to argue that liberal states desisted from vengeful, excessive forms of punishment in the 19th century, replacing them with expert forms of discipline rooted in detailed statistical, psychological and economic knowledge of how to achieve optimal outcomes, then contemporary austerity regimes would appear to be reversing certain aspects of this. It is no longer clear that the social sciences, economics or psychology are being applied in a normative, methodological, publicly falsifiable sense. Instead, they appear to be operating as arms of sovereign power, asserting truths rather than discovering them.
Dead yet still dominant?
If today we live under neoliberalism, it is manifestly different from the neoliberalism that rose to power in the late 1970s and early 1980s, and different again from that which held sway from the 1990s, in the long boom preceding 2008. The nomenclature has always been a controversial one. It is frequently suggested that the term ‘neoliberalism’ refers to too many heterogeneous or contradictory policy dynamics, and is therefore useless. Of course, the internal inconsistency of the concept may encapsulate something real about the system it purports to capture. Yet there is nevertheless something problematic about ascribing governmental interventions in 2016 to the same overarching rationality or teleology as those of 2001 or 1985. It would certainly appear that neoliberalism has entered some sort of post-hegemonic phase, in which systems and routines of power survive, but without normative or democratic authority. In this sense, neoliberalism is, as Neil Smith put it, ‘dead yet still dominant’.footnote4 But what if the new power forms are not dwindling, as that would suggest, but abandoning the quest for hegemony, in Gramsci’s ethical sense, altogether? What has emerged, I want to suggest, is not simply another ‘post’ but a new phase of neoliberalism, which is organized around an ethos of punishment. This is not the type of punishment conceived by Bentham and historicized by Foucault, namely a measured science of displeasure. Rather, it is a relentless form that acts in place of reasoned discourse, replacing the need for hegemonic consensus formation. It is this that provokes shock and incredulity in response, captured in the notion of ‘fiscal waterboarding’.
To understand this new phase historically, we need to consider how it differs from what came before 2008. From this perspective, it is clear that there was not a single epoch of neoliberalism, but two. Firstly, there was the spread of neoliberalism from around 1979, which lasted for roughly a decade leading up to the fall of the Berlin Wall, led by neoconservative parties of the right, and notably by Reagan and Thatcher (even if Carter and Callaghan had delivered the first blows). Secondly, there was the application of neoliberalism which lasted nearly two decades, between the demise of state socialism and the global financial crisis. Importantly, this was advanced by liberal and ex-socialist parties of the centre left, leaving many of these parties now in a state of disarray as a result. The epochal distinction I seek to draw is not between modes of regulation or varieties of policy as such, but between the ethical and philosophical orientations that accompany them. The same instruments of state power can carry multiple meanings, at different points in history. The telos or a priori principle of a policy is intangible, but exists nevertheless in the psychology and mutually understood practices of those who implement and live with it. With this in mind, I offer an interpretation of the successive ethical philosophies that have provided the neoliberal state with its orientation. What has changed since 2008 is not so much the techniques of power—which have remained eerily constant—but the spirit or meaning in their enactment.
1. combative neoliberalism: 1979–89
The origins of neoliberalism, as a distinctive political and intellectual project, can be traced back to the socialist calculation debate, and Ludwig von Mises in particular.footnote5 These foundations indicate something about the character of the neoliberal critical reason that would follow. Long before Hayek and his allies attempted to construct a positive vision of neoliberal government, Mises had signalled the primarily obstructive, even destructive, ambitions of neoliberal intellectuals. At the heart of his 1920s contributions was the need to discredit the rationality of socialism. He set an impossible standard for what a ‘rational’ socialist government would need to look like. Focusing on the philosophical problem of intersubjective valuation, Mises famously argued that the price system was the only conceivable means of converting values into commensurable metrics of calculation. Investment in productive capital would be irrational without such a system, given the time horizons and complexities involved in industrial production. While Mises himself was never a central figure in the later ‘neoliberal thought collective’, as Philip Mirowski calls it, he offered a model for the critical dismantlement of socialist and Keynesian policymaking.footnote6 His style of critique set the tone for what would follow: insistence on simple, seemingly obvious binary choices between liberal market capitalism and everything else.
As Mirowski notes, the thinking of the early neoliberals shared aspects of Carl Schmitt’s anti-democratic political realism. Their view of ‘the political’, present also in the American tradition of neoliberalism that emerged at the Universities of Virginia and Chicago, was one dominated by the problem of executive decision, which needed insulating from short-term populist objectives. Placing executive power in the hands of rational technocrats would be the necessary corollary of safeguarding the rationality of the price system. One can also witness another classically Schmittian dimension to the neoliberal style of critique: the starkness of the choice between market economies and everything else introduces a friend–enemy distinction to the field of economic policymaking. Socialism represented the necessary enemy for neoliberalism to coalesce as a political identity.
How neoliberalism developed between the socialist calculation debate and the triumph of the New Right in the 1980s is a story that has been told elsewhere. Many accounts have stressed the role of think-tanks in developing the positive policy platform that Hayek sought to construct. Yet it would be an error to forget that this movement was catalysed, held together and motivated by a spirit of resistance to non-capitalist political and intellectual forces. Inspired by examples from the left, it was a self-conscious insurgency, a social movement aimed at combating and ideally destroying the enemies of liberal capitalism. To the surprise of much of the left in the late 1970s, capital was able to re-organize socially and politically, just as labour had once done.footnote7 In its applied form, combative neoliberalism involved an array of tactics aimed at undermining the possibility of socialism. Anti-labour legislation and sometimes violent confrontations with trade unions—air-traffic controllers in the us, miners in the uk—were chief amongst these. Anti-inflationary monetarist policies and high interest rates had the added effect of driving up unemployment to unprecedented levels. Alan Budd, one of Thatcher’s economic advisors, later confessed that this was an underlying goal of monetarism all along.footnote8 Accelerated military spending by the Reagan government placed unsustainable strains on the Soviet economy, while masking the lack of private-sector growth in the United States.
Classically Marxist accounts, such as David Harvey’s, focus on these political developments as proof that the neoliberal state is an instrument of class power.footnote9 The restoration of the rate of profit, following the inflationary slump of the 1970s, was its abiding purpose, though not one it lastingly achieved. But this does not capture the cultural and ideological orientation of combative neoliberalism, which was to demolish non-capitalist avenues of political hope. David Graeber puts this succinctly: ‘Whenever there is a choice between one option that makes capitalism seem the only possible economic system, and another that would actually make capitalism a more viable economic system, neoliberalism means always choosing the former.’footnote10 The stark binary first introduced by Mises, between the rationality of the price system and the irrationality of anything else, has the effect of obscuring all differences that exist between systems and cultures of socialism. It obliterates choices between more and less effective forms of collectivism, while occluding the various types of mixed economy that succeeded during the post-war boom.
The coherence of neoliberalism as a particular form of critique and political practice was therefore invented only in combative opposition to socialism, whose destruction, both internationally and domestically, provided its animating telos. Many of the flagship neoliberal policies of the 1980s did not ‘work’ in any measurable utilitarian sense. Subsequent analysis has shown that uk labour-market reforms, for example, did nothing to increase the level of private-sector employment in the long run, once the effects of privatization are stripped out.footnote11 But they succeeded in their more diffuse ethical agenda, of anchoring political hopes and identities in non-socialist economic forms.
2.normative neoliberalism: 1989–2008
What is neoliberalism in the absence of socialism—what provides its orientation or ethical coherence? Neoliberalism’s golden age in the 1990s, described by Giovanni Arrighi as the belle époque of America’s global hegemony, witnessed a different mode of government. Once the horizons of political hope had been delimited to a single political-economic system, the project of modernization became an explicitly normative one, of how to render that system ‘fair’. The neoliberal telos became a constructivist one, of rendering market-based metrics and instruments the measure of all human worth, not only inside the market but, crucially, outside it as well. Foucault was one of the first to notice that neoliberal intellectuals were not only engaged in a critical demolition of the claims for economic planning, à la Mises, but also in a remaking of subjectivity around the ideal of enterprise.footnote12 Concepts such as ‘human capital’ offered a new lens through which to analyse and calculate decision-making in non-market contexts. The virtue of markets was their competitive quality, which provided a normative procedure through which value and knowledge could be ascertained.footnote13 According to this logic, all spheres of human activity should therefore be reconstructed around the standards of competition, so as to ensure that valuable products, services, artefacts, ideas and people were discoverable. The task of government was now to ensure that ‘winners’ were clearly distinguishable from ‘losers’, and that the contest was perceived as fair.
In practice, this involved the constant modernization of administration, management and accounting. The reforms of public-sector bureaucracies sought to inject a spirit of enterprise into government itself. In the uk, the Research Assessment Exercise was introduced in 1986 to impose a score on every university department in the country, producing a ranking from best to worst in research quality. Over the 1990s, arts institutions were exhorted to implement new accounting methods for capturing value. Cost–benefit analysis, coupled to the neoclassical language of ‘market failure’, became the tests of legitimate public spending. Techniques of strategic audit were invented for ranking the ‘competitiveness’ of nations, regions and cities. The expansion of neoclassical economics and auditing into all walks of social and political life was a disheartening phenomenon, which stripped non-market domains of their autonomous logics.footnote14 It achieved what I have described as neoliberalism’s disenchantment of politics by economics. Yet it is important also to recognize the normative procedures and constraints that this constructs around the exercise of political power. Under such conditions, neoclassical economics becomes a soft constitution for government, or ‘governance’ in its devolved forms. Normative questions of fairness, reward and recognition become channelled into economic tests of efficiency and comparisons of ‘excellence’. Coupled to markets and quasi-market contests, the ideal is that of meritocracy, of reward being legitimately earned, rather than arbitrarily inherited.
Centre-left governments were better suited to the pursuit of normative neoliberalism, or what was called the Third Way, for two reasons. Firstly, as a mode of government aimed at modernizing public institutions and intervening in social life, this required techniques, institutions and expertise traditionally associated with social democracy rather than with conservatism.footnote15 It was a self-consciously progressive project, fuelled by a reformist desire to produce a fair society unhindered by constraints of culture or tradition. Secondly, higher levels of social spending often accompanied the development of this new economistic hegemony. The centre left viewed the spread of economic audits as the necessary means of achieving value in public services and programmes in a post-social-democratic age.footnote16 In cases such as higher education or the arts, professionals experienced auditing not merely as punitive or panoptical, but as the basis on which they could legitimately earn more funding.
Given the constitutional importance of competition within normative neoliberalism, its legitimacy has never been threatened by inequality as such. Its moral vision hung ultimately on the authority of the audits, economic tests and methodologies that various agencies used to judge and calculate value across society at large. These valuations had to retain some a priori status, in order for normative neoliberalism to hold together. That distinction was lost during the banking crisis once it emerged that systems of audit and economic modelling could potentially serve vested political and economic interests. The discovery that auditors and credit raters were also driven by financial incentives helped to strip normative neoliberalism of its ideological coherence. Inequality, which had been rising in most of the Global North since the 1980s, returned as a major concern only once the tests of legitimate inequality had been found to be faulty.
3. punitive neoliberalism: 2008–?
Looking back on the first two phases of neoliberalism, it is curious that critical theorists and social scientists largely failed to recognize one of their defining economic characteristics: the build-up of debt. As Wolfgang Streeck shows in Buying Time, there was a phase of rising public debt, coinciding with what I have termed combative neoliberalism, followed by a phase of rising private debt, coinciding with normative neoliberalism. But it was not until after the fact that much critical or analytical attention was paid to either of these. While financialization was on the rise, it was largely mistaken for other forms of immaterial value, such as ‘creativity’ or ‘knowledge’footnote17—concealing the political logic of debt during periods of combative and normative neoliberalism, which then came dramatically to the fore following the global financial crisis.
The transfer of banking debts onto government balance sheets, creating the justification for austerity, has triggered a third phase of neoliberalism, which operates with an ethos of heavily moralized—as opposed to utilitarian—punishment. What distinguishes the spirit of punishment is its post jure logic, that is, the sense that the moment of judgement has already passed, and questions of value or guilt are no longer open to deliberation. By the same token, it is post-critical. Under punitive neoliberalism, economic dependency and moral failure become entangled in the form of debt, producing a melancholic condition in which governments and societies unleash hatred and violence upon members of their own populations. When debt is combined with political weakness, it becomes a condition for further punishment. Studies of those living in poverty with problem debts found a prevalent psychology of melancholia, whereby debt exacerbates a sense of self-recrimination and the expectation of further punishment.footnote18 Research on public attitudes to austerity confirms a similar internalization of financial morality, which produces the sense that we ‘deserve’ to suffer for credit-fuelled economic growth.footnote19
The policy instruments and practices of punitive neoliberalism have strong family resemblances to those that were propagated in neoliberalism’s first phases. Britain’s Conservative Party has brought back Thatcher-era policies, such as an expansion of the ‘right to buy’ social housing, only now extended to tenants of non-profit housing associations, and anti-union legislation, such as a requirement to communicate picketing activities in advance to police and a ban on online balloting of members for strike action. These were even described as ‘out of proportion’ by the Financial Times.footnote20 It is not immediately clear what such measures are seeking to achieve. Judged against most standards of orthodox economic evaluation, they are self-destructive. Britain’s inflated housing market is already a source of deep structural problems in its economy and, since 2008, the British economy has lost fewer days to strike action annually than at any point between 1900 and 1990. Greater union density and bargaining power would most likely raise wages, reduce inequality and thereby help promote more sustainable growth.footnote21
The techniques associated with normative neoliberalism also take on a newly punitive quality. During times of growth, the spread of audits into the public and cultural sectors was experienced as a quasi-consensual basis on which to distribute more funds. During times of austerity, the same techniques become tools through which to withdraw them, producing manifold injuries in the process. Warren Buffett’s famous claim, that ‘only when the tide goes out do you discover who’s swimming naked’, is now being forcefully extended to the public and cultural realms. The government expectation that public-sector productivity can alleviate the losses associated with austerity means that the declining mental and physical health of public-sector workers is now one of the most significant indexes of fiscal retrenchment. A survey conducted in early 2015 found that nearly half of teachers in England had visited a doctor for reasons to do with stress, and more than two thirds were thinking of quitting; similarly, 70 per cent of junior doctors are considering leaving the National Health Service, in response to unpaid extension of working hours.footnote22 The suicide of Stefan Grimm, a German scientist based at Imperial College, London, who had been set a target of research income to raise, in a context of increasingly competitive grant contests, highlights the types of strain that punitive target-setting can create in an age when funds are shrinking. The conflicts and injuries of neoliberalism are now increasingly played out in the somatic arena. The limits to austerity are most effectively asserted by disability rights activists and striking doctors, who have achieved a level of public support that represents a genuine worry to the Conservative government.
Yet the superficial similarity of contemporary neoliberalism to earlier phases masks a profound difference: in this phase, it is not at all clear why such measures are being introduced, other than out of a desire to extract some form of vengeance. The Schmittian worldview of the neoliberal pioneers, which pitted free-market capitalism against all varieties of non-capitalist system, has mutated into something equally paranoid and simplistic, but now apparently self-destructive. In contrast to the offensive against socialism, the ‘enemies’ targeted now are largely disempowered and internal to the neoliberal system itself. In some instances, such as those crippled by poverty, debt and collapsing social-safety nets, they have already been largely destroyed as an autonomous political force. Yet somehow this increases the urge to punish them further.
Representation or repetition?
The crisis of Fordist Keynesianism in the 1970s obeyed a classically modern rhythm of crisis, in line with Thomas Kuhn’s model of a paradigm shift. Economic contingencies elicited a crisis of theoretical and regulatory orthodoxy; this produced a period of epistemic and political uncertainty, which then created a space for competing theories and policy ideas to gain credibility. Gramsci’s famous observation in the Prison Notebooks, that ‘the crisis consists precisely in the fact that the old is dying and the new cannot be born’, might have well described the middle years of the 1970s, before the rise of neoliberalism. Today, however, the old is not dying, but being revived.
The structure of historical crisis is mirrored in the grammar of critique, in which the semiotic capacity to represent reality is used as a means of hastening the transformation of that reality. Representation may be employed to highlight the suffering that is latent within the present situation, or to demonstrate the contradictory and unsustainable nature of the impasse. However, the interplay between critique and crisis assumes at the very least that all parties are committed to a credible semiotic representation, even if this is merely in the service of a new hegemony. But what if they are not? This is the problem that Varoufakis highlights when he says ‘it was as if one had not spoken’. One way of interpreting the apparently senseless violence of punitive neoliberalism is as a strategy for the circumvention of crisis and, at the same time, an avoidance of critique. In place of critical forms of knowledge, which necessarily represent the deficiencies of the present, forms of empty affirmation are offered, to be repeated ritualistically. These lack any epistemological or semiotic aspiration to represent reality, but are instead ways of reinforcing it. When political leaders say that austerity will result in economic growth, the purpose of such speech acts is to repeat, not to represent. Likewise when benefit claimants are compelled to recite slogans such as ‘My only limits are the ones I set myself’, these are plainly not statements of truth or fact. They are what Luc Boltanski has termed ‘systems of confirmation’, performative utterances which seek to preserve the status quo and to occupy the discursive space that might otherwise be filled by empirical or critical questions about the nature of reality.
In contrast to the Fordist society observed by Gramsci, power now seeks to circumvent the public sphere, in order to avoid the constraints of critical reason. Increasingly, it is non-representational codes—of software, finance, human biology—that mediate between past, present and future, allowing society to cohere. Where, for example, employee engagement cannot be achieved via cultural or psychological means, increasingly business is looking to solutions such as wearable technology, that treat the worker as an item of fixed capital to be monitored physically, rather than human capital to be employed. The key human characteristics are those that are repeated in a quasi-mechanical fashion: footsteps, nightly sleep, respiration, heartbeat. These metronomic qualities of life come to represent each passing moment as yet another one of the same.
Underlying the new neoliberalism’s circumvention of critical forms of knowledge there gapes the truth it is so anxious to avoid—the absence of profitable alternatives to the current, broken model of capitalist accumulation, which it is striving to prop up. Global capitalist development has been confounded by its own success: it has brought about massive over-capacity in manufacturing, with a glut in production driving down profits, combined with a huge over-supply of labour, weakening wages and therefore demand. With only the occasional brief uptick, profitability rates have been falling, business cycle on business cycle, since the end of the trente glorieuses. Underlying this is the drastic failure to achieve a viable and profitable model of capitalism since the demise of Fordist Keynesianism. The once tacit, and now explicit, dependence of the neoliberal model upon the rising indebtedness of public and private sectors has been, as Streeck shows, a forty-year-long exercise in kicking the can down the road. Ultimately, the function of apparently irrational symptoms in today’s neoliberalism is to duck or conceal this realization.
The founding idea of neoliberalism, dating back to the 1920s, is Mises’s argument that there can be no scientific account of human need, but only of consumer preference. Until this dogma is refuted by historical experience, it seems inevitable that resistance and conflict will reverberate around policy issues of disability and healthcare, where the finitude and fallibility of the human body offers the simplest falsification of Mises’s doctrine, while it might yet perhaps contribute to a different hegemony altogether. Neoliberalism has become incredible, but that is partly because it is a system that no longer seeks credibility in the way that hegemonies used to do, through a degree of cultural or normative consensus. Sovereign power has always had a circular logic, exercised to demonstrate that it can be exercised. Yet today, that sovereignty is found in technical and technocratic spheres: policies, punishments, cuts, calculations are simply being repeated, as that is the sole condition of their reality. The coercions of post-2008 policymaking are those of a system in retreat from both the ideology and the reality of rational public dialogue, and the epistemological constraints which that involves. One may offer a detailed economic critique, mobilize the vast mass of the country or sing the Swedish national anthem, scream or lampoon, but all forms of dissent will be treated as equivalent. This, at least, is something that satire can demonstrate.
One result of this seeming irrationalism from above has been the vindication of unreason from below. The British performance artist Mark McGowan, also known as ‘The Artist Taxi Driver’, exemplifies this in his YouTube videos. McGowan sits in his car in wrap-around shades, unleashing his fury at austerity measures, political elites, tax evaders and the senseless social harm that has been enacted since the financial crisis. As he gesticulates at the camera on his dashboard, the mood is one of disbelief, closer to hilarity than to despair, as if to ask: can this really be happening? One of The Artist Taxi Driver’s straplines was ‘This is not a recession, this is a robbery’. Allegations of illegal violence are common in this new culture of protest, as in the ubiquitous complaints that #thisisacoup, or Varoufakis’s memorable description of Greece’s debt conditions as ‘fiscal waterboarding’. In the us, The Onion and The Daily Show have long offered a model of satirical reporting on the political scene. The Daily Mash, a British website, has developed a more specific focus on economic nonsense, with articles such as ‘“Getting your name out there” to become legal tender’ or ‘Tories to build thousands of affordable second homes’. The proximity of these headlines to ‘real’ news effectively offers readers a choice of two stories, both equally absurd.
This seeming shift to unreason by the governing powers has been characterized since 2008 by more vindictive varieties of policymaking, which often operate outside of the norms of policy evaluation, evidence gathering or public appeal. In the past, neoliberalism has been criticized for elevating economic judgements of ‘efficiency’ or ‘competitiveness’ above moral judgements of social justice. But increasingly it appears, at least at the level of public discourse, that governments are operating outside of the norms of judgement altogether. The best example of this is austerity itself. History offers scant examples of pro-cyclical fiscal-contraction programmes that have succeeded in avoiding macroeconomic stagnation.footnote2 The hypothesis of ‘expansionary fiscal austerity’, put forward by Harvard economist Alberto Alesina and enthusiastically cited by a number of European political leaders since 2008, only ever proposed that spending cuts need not necessarily lead to reduced growth. Yet no amount of empirical evidence of austerity’s failings seems adequate to derail those who pronounce its necessity.
Social policies aimed at disciplining vulnerable populations have become equally unbelievable. Under Britain’s ‘benefit sanctions’ regime, welfare payments can be suddenly suspended for up to a month on account of trivial breaches, without any sense of procedural reason as to how the rules are applied. One man had a heart attack on the way to an appointment, but was nevertheless sanctioned; another lost his benefits for going to his brother’s funeral, having been unable to get through when he tried to phone the Job Centre. Over a million people in the uk have received sanctions for one reason or another. Thousands have died after being declared ‘fit for work’ by workfare contractors and having their disability benefits cut.footnote3 Labour-market policies now incorporate dubious behavioural activation techniques, from neuro-linguistic programming to self-marketing slogans. Participants must read out ‘affirmations’, such as ‘My only limitations are the ones I set for myself’, which are almost comically distant from the reality of those living with low incomes, chronic health conditions and dependent family members.
It might be argued that such policies are not beyond reason altogether. Austerity clearly has its beneficiaries in creditor states and financial institutions; harsh treatment for welfare recipients serves well-known electoral agendas. Yet these trends do seem to exist outside of public governmental reason. If Foucault was right to argue that liberal states desisted from vengeful, excessive forms of punishment in the 19th century, replacing them with expert forms of discipline rooted in detailed statistical, psychological and economic knowledge of how to achieve optimal outcomes, then contemporary austerity regimes would appear to be reversing certain aspects of this. It is no longer clear that the social sciences, economics or psychology are being applied in a normative, methodological, publicly falsifiable sense. Instead, they appear to be operating as arms of sovereign power, asserting truths rather than discovering them.
Dead yet still dominant?
If today we live under neoliberalism, it is manifestly different from the neoliberalism that rose to power in the late 1970s and early 1980s, and different again from that which held sway from the 1990s, in the long boom preceding 2008. The nomenclature has always been a controversial one. It is frequently suggested that the term ‘neoliberalism’ refers to too many heterogeneous or contradictory policy dynamics, and is therefore useless. Of course, the internal inconsistency of the concept may encapsulate something real about the system it purports to capture. Yet there is nevertheless something problematic about ascribing governmental interventions in 2016 to the same overarching rationality or teleology as those of 2001 or 1985. It would certainly appear that neoliberalism has entered some sort of post-hegemonic phase, in which systems and routines of power survive, but without normative or democratic authority. In this sense, neoliberalism is, as Neil Smith put it, ‘dead yet still dominant’.footnote4 But what if the new power forms are not dwindling, as that would suggest, but abandoning the quest for hegemony, in Gramsci’s ethical sense, altogether? What has emerged, I want to suggest, is not simply another ‘post’ but a new phase of neoliberalism, which is organized around an ethos of punishment. This is not the type of punishment conceived by Bentham and historicized by Foucault, namely a measured science of displeasure. Rather, it is a relentless form that acts in place of reasoned discourse, replacing the need for hegemonic consensus formation. It is this that provokes shock and incredulity in response, captured in the notion of ‘fiscal waterboarding’.
To understand this new phase historically, we need to consider how it differs from what came before 2008. From this perspective, it is clear that there was not a single epoch of neoliberalism, but two. Firstly, there was the spread of neoliberalism from around 1979, which lasted for roughly a decade leading up to the fall of the Berlin Wall, led by neoconservative parties of the right, and notably by Reagan and Thatcher (even if Carter and Callaghan had delivered the first blows). Secondly, there was the application of neoliberalism which lasted nearly two decades, between the demise of state socialism and the global financial crisis. Importantly, this was advanced by liberal and ex-socialist parties of the centre left, leaving many of these parties now in a state of disarray as a result. The epochal distinction I seek to draw is not between modes of regulation or varieties of policy as such, but between the ethical and philosophical orientations that accompany them. The same instruments of state power can carry multiple meanings, at different points in history. The telos or a priori principle of a policy is intangible, but exists nevertheless in the psychology and mutually understood practices of those who implement and live with it. With this in mind, I offer an interpretation of the successive ethical philosophies that have provided the neoliberal state with its orientation. What has changed since 2008 is not so much the techniques of power—which have remained eerily constant—but the spirit or meaning in their enactment.
1. combative neoliberalism: 1979–89
The origins of neoliberalism, as a distinctive political and intellectual project, can be traced back to the socialist calculation debate, and Ludwig von Mises in particular.footnote5 These foundations indicate something about the character of the neoliberal critical reason that would follow. Long before Hayek and his allies attempted to construct a positive vision of neoliberal government, Mises had signalled the primarily obstructive, even destructive, ambitions of neoliberal intellectuals. At the heart of his 1920s contributions was the need to discredit the rationality of socialism. He set an impossible standard for what a ‘rational’ socialist government would need to look like. Focusing on the philosophical problem of intersubjective valuation, Mises famously argued that the price system was the only conceivable means of converting values into commensurable metrics of calculation. Investment in productive capital would be irrational without such a system, given the time horizons and complexities involved in industrial production. While Mises himself was never a central figure in the later ‘neoliberal thought collective’, as Philip Mirowski calls it, he offered a model for the critical dismantlement of socialist and Keynesian policymaking.footnote6 His style of critique set the tone for what would follow: insistence on simple, seemingly obvious binary choices between liberal market capitalism and everything else.
As Mirowski notes, the thinking of the early neoliberals shared aspects of Carl Schmitt’s anti-democratic political realism. Their view of ‘the political’, present also in the American tradition of neoliberalism that emerged at the Universities of Virginia and Chicago, was one dominated by the problem of executive decision, which needed insulating from short-term populist objectives. Placing executive power in the hands of rational technocrats would be the necessary corollary of safeguarding the rationality of the price system. One can also witness another classically Schmittian dimension to the neoliberal style of critique: the starkness of the choice between market economies and everything else introduces a friend–enemy distinction to the field of economic policymaking. Socialism represented the necessary enemy for neoliberalism to coalesce as a political identity.
How neoliberalism developed between the socialist calculation debate and the triumph of the New Right in the 1980s is a story that has been told elsewhere. Many accounts have stressed the role of think-tanks in developing the positive policy platform that Hayek sought to construct. Yet it would be an error to forget that this movement was catalysed, held together and motivated by a spirit of resistance to non-capitalist political and intellectual forces. Inspired by examples from the left, it was a self-conscious insurgency, a social movement aimed at combating and ideally destroying the enemies of liberal capitalism. To the surprise of much of the left in the late 1970s, capital was able to re-organize socially and politically, just as labour had once done.footnote7 In its applied form, combative neoliberalism involved an array of tactics aimed at undermining the possibility of socialism. Anti-labour legislation and sometimes violent confrontations with trade unions—air-traffic controllers in the us, miners in the uk—were chief amongst these. Anti-inflationary monetarist policies and high interest rates had the added effect of driving up unemployment to unprecedented levels. Alan Budd, one of Thatcher’s economic advisors, later confessed that this was an underlying goal of monetarism all along.footnote8 Accelerated military spending by the Reagan government placed unsustainable strains on the Soviet economy, while masking the lack of private-sector growth in the United States.
Classically Marxist accounts, such as David Harvey’s, focus on these political developments as proof that the neoliberal state is an instrument of class power.footnote9 The restoration of the rate of profit, following the inflationary slump of the 1970s, was its abiding purpose, though not one it lastingly achieved. But this does not capture the cultural and ideological orientation of combative neoliberalism, which was to demolish non-capitalist avenues of political hope. David Graeber puts this succinctly: ‘Whenever there is a choice between one option that makes capitalism seem the only possible economic system, and another that would actually make capitalism a more viable economic system, neoliberalism means always choosing the former.’footnote10 The stark binary first introduced by Mises, between the rationality of the price system and the irrationality of anything else, has the effect of obscuring all differences that exist between systems and cultures of socialism. It obliterates choices between more and less effective forms of collectivism, while occluding the various types of mixed economy that succeeded during the post-war boom.
The coherence of neoliberalism as a particular form of critique and political practice was therefore invented only in combative opposition to socialism, whose destruction, both internationally and domestically, provided its animating telos. Many of the flagship neoliberal policies of the 1980s did not ‘work’ in any measurable utilitarian sense. Subsequent analysis has shown that uk labour-market reforms, for example, did nothing to increase the level of private-sector employment in the long run, once the effects of privatization are stripped out.footnote11 But they succeeded in their more diffuse ethical agenda, of anchoring political hopes and identities in non-socialist economic forms.
2.normative neoliberalism: 1989–2008
What is neoliberalism in the absence of socialism—what provides its orientation or ethical coherence? Neoliberalism’s golden age in the 1990s, described by Giovanni Arrighi as the belle époque of America’s global hegemony, witnessed a different mode of government. Once the horizons of political hope had been delimited to a single political-economic system, the project of modernization became an explicitly normative one, of how to render that system ‘fair’. The neoliberal telos became a constructivist one, of rendering market-based metrics and instruments the measure of all human worth, not only inside the market but, crucially, outside it as well. Foucault was one of the first to notice that neoliberal intellectuals were not only engaged in a critical demolition of the claims for economic planning, à la Mises, but also in a remaking of subjectivity around the ideal of enterprise.footnote12 Concepts such as ‘human capital’ offered a new lens through which to analyse and calculate decision-making in non-market contexts. The virtue of markets was their competitive quality, which provided a normative procedure through which value and knowledge could be ascertained.footnote13 According to this logic, all spheres of human activity should therefore be reconstructed around the standards of competition, so as to ensure that valuable products, services, artefacts, ideas and people were discoverable. The task of government was now to ensure that ‘winners’ were clearly distinguishable from ‘losers’, and that the contest was perceived as fair.
In practice, this involved the constant modernization of administration, management and accounting. The reforms of public-sector bureaucracies sought to inject a spirit of enterprise into government itself. In the uk, the Research Assessment Exercise was introduced in 1986 to impose a score on every university department in the country, producing a ranking from best to worst in research quality. Over the 1990s, arts institutions were exhorted to implement new accounting methods for capturing value. Cost–benefit analysis, coupled to the neoclassical language of ‘market failure’, became the tests of legitimate public spending. Techniques of strategic audit were invented for ranking the ‘competitiveness’ of nations, regions and cities. The expansion of neoclassical economics and auditing into all walks of social and political life was a disheartening phenomenon, which stripped non-market domains of their autonomous logics.footnote14 It achieved what I have described as neoliberalism’s disenchantment of politics by economics. Yet it is important also to recognize the normative procedures and constraints that this constructs around the exercise of political power. Under such conditions, neoclassical economics becomes a soft constitution for government, or ‘governance’ in its devolved forms. Normative questions of fairness, reward and recognition become channelled into economic tests of efficiency and comparisons of ‘excellence’. Coupled to markets and quasi-market contests, the ideal is that of meritocracy, of reward being legitimately earned, rather than arbitrarily inherited.
Centre-left governments were better suited to the pursuit of normative neoliberalism, or what was called the Third Way, for two reasons. Firstly, as a mode of government aimed at modernizing public institutions and intervening in social life, this required techniques, institutions and expertise traditionally associated with social democracy rather than with conservatism.footnote15 It was a self-consciously progressive project, fuelled by a reformist desire to produce a fair society unhindered by constraints of culture or tradition. Secondly, higher levels of social spending often accompanied the development of this new economistic hegemony. The centre left viewed the spread of economic audits as the necessary means of achieving value in public services and programmes in a post-social-democratic age.footnote16 In cases such as higher education or the arts, professionals experienced auditing not merely as punitive or panoptical, but as the basis on which they could legitimately earn more funding.
Given the constitutional importance of competition within normative neoliberalism, its legitimacy has never been threatened by inequality as such. Its moral vision hung ultimately on the authority of the audits, economic tests and methodologies that various agencies used to judge and calculate value across society at large. These valuations had to retain some a priori status, in order for normative neoliberalism to hold together. That distinction was lost during the banking crisis once it emerged that systems of audit and economic modelling could potentially serve vested political and economic interests. The discovery that auditors and credit raters were also driven by financial incentives helped to strip normative neoliberalism of its ideological coherence. Inequality, which had been rising in most of the Global North since the 1980s, returned as a major concern only once the tests of legitimate inequality had been found to be faulty.
3. punitive neoliberalism: 2008–?
Looking back on the first two phases of neoliberalism, it is curious that critical theorists and social scientists largely failed to recognize one of their defining economic characteristics: the build-up of debt. As Wolfgang Streeck shows in Buying Time, there was a phase of rising public debt, coinciding with what I have termed combative neoliberalism, followed by a phase of rising private debt, coinciding with normative neoliberalism. But it was not until after the fact that much critical or analytical attention was paid to either of these. While financialization was on the rise, it was largely mistaken for other forms of immaterial value, such as ‘creativity’ or ‘knowledge’footnote17—concealing the political logic of debt during periods of combative and normative neoliberalism, which then came dramatically to the fore following the global financial crisis.
The transfer of banking debts onto government balance sheets, creating the justification for austerity, has triggered a third phase of neoliberalism, which operates with an ethos of heavily moralized—as opposed to utilitarian—punishment. What distinguishes the spirit of punishment is its post jure logic, that is, the sense that the moment of judgement has already passed, and questions of value or guilt are no longer open to deliberation. By the same token, it is post-critical. Under punitive neoliberalism, economic dependency and moral failure become entangled in the form of debt, producing a melancholic condition in which governments and societies unleash hatred and violence upon members of their own populations. When debt is combined with political weakness, it becomes a condition for further punishment. Studies of those living in poverty with problem debts found a prevalent psychology of melancholia, whereby debt exacerbates a sense of self-recrimination and the expectation of further punishment.footnote18 Research on public attitudes to austerity confirms a similar internalization of financial morality, which produces the sense that we ‘deserve’ to suffer for credit-fuelled economic growth.footnote19
The policy instruments and practices of punitive neoliberalism have strong family resemblances to those that were propagated in neoliberalism’s first phases. Britain’s Conservative Party has brought back Thatcher-era policies, such as an expansion of the ‘right to buy’ social housing, only now extended to tenants of non-profit housing associations, and anti-union legislation, such as a requirement to communicate picketing activities in advance to police and a ban on online balloting of members for strike action. These were even described as ‘out of proportion’ by the Financial Times.footnote20 It is not immediately clear what such measures are seeking to achieve. Judged against most standards of orthodox economic evaluation, they are self-destructive. Britain’s inflated housing market is already a source of deep structural problems in its economy and, since 2008, the British economy has lost fewer days to strike action annually than at any point between 1900 and 1990. Greater union density and bargaining power would most likely raise wages, reduce inequality and thereby help promote more sustainable growth.footnote21
The techniques associated with normative neoliberalism also take on a newly punitive quality. During times of growth, the spread of audits into the public and cultural sectors was experienced as a quasi-consensual basis on which to distribute more funds. During times of austerity, the same techniques become tools through which to withdraw them, producing manifold injuries in the process. Warren Buffett’s famous claim, that ‘only when the tide goes out do you discover who’s swimming naked’, is now being forcefully extended to the public and cultural realms. The government expectation that public-sector productivity can alleviate the losses associated with austerity means that the declining mental and physical health of public-sector workers is now one of the most significant indexes of fiscal retrenchment. A survey conducted in early 2015 found that nearly half of teachers in England had visited a doctor for reasons to do with stress, and more than two thirds were thinking of quitting; similarly, 70 per cent of junior doctors are considering leaving the National Health Service, in response to unpaid extension of working hours.footnote22 The suicide of Stefan Grimm, a German scientist based at Imperial College, London, who had been set a target of research income to raise, in a context of increasingly competitive grant contests, highlights the types of strain that punitive target-setting can create in an age when funds are shrinking. The conflicts and injuries of neoliberalism are now increasingly played out in the somatic arena. The limits to austerity are most effectively asserted by disability rights activists and striking doctors, who have achieved a level of public support that represents a genuine worry to the Conservative government.
Yet the superficial similarity of contemporary neoliberalism to earlier phases masks a profound difference: in this phase, it is not at all clear why such measures are being introduced, other than out of a desire to extract some form of vengeance. The Schmittian worldview of the neoliberal pioneers, which pitted free-market capitalism against all varieties of non-capitalist system, has mutated into something equally paranoid and simplistic, but now apparently self-destructive. In contrast to the offensive against socialism, the ‘enemies’ targeted now are largely disempowered and internal to the neoliberal system itself. In some instances, such as those crippled by poverty, debt and collapsing social-safety nets, they have already been largely destroyed as an autonomous political force. Yet somehow this increases the urge to punish them further.
Representation or repetition?
The crisis of Fordist Keynesianism in the 1970s obeyed a classically modern rhythm of crisis, in line with Thomas Kuhn’s model of a paradigm shift. Economic contingencies elicited a crisis of theoretical and regulatory orthodoxy; this produced a period of epistemic and political uncertainty, which then created a space for competing theories and policy ideas to gain credibility. Gramsci’s famous observation in the Prison Notebooks, that ‘the crisis consists precisely in the fact that the old is dying and the new cannot be born’, might have well described the middle years of the 1970s, before the rise of neoliberalism. Today, however, the old is not dying, but being revived.
The structure of historical crisis is mirrored in the grammar of critique, in which the semiotic capacity to represent reality is used as a means of hastening the transformation of that reality. Representation may be employed to highlight the suffering that is latent within the present situation, or to demonstrate the contradictory and unsustainable nature of the impasse. However, the interplay between critique and crisis assumes at the very least that all parties are committed to a credible semiotic representation, even if this is merely in the service of a new hegemony. But what if they are not? This is the problem that Varoufakis highlights when he says ‘it was as if one had not spoken’. One way of interpreting the apparently senseless violence of punitive neoliberalism is as a strategy for the circumvention of crisis and, at the same time, an avoidance of critique. In place of critical forms of knowledge, which necessarily represent the deficiencies of the present, forms of empty affirmation are offered, to be repeated ritualistically. These lack any epistemological or semiotic aspiration to represent reality, but are instead ways of reinforcing it. When political leaders say that austerity will result in economic growth, the purpose of such speech acts is to repeat, not to represent. Likewise when benefit claimants are compelled to recite slogans such as ‘My only limits are the ones I set myself’, these are plainly not statements of truth or fact. They are what Luc Boltanski has termed ‘systems of confirmation’, performative utterances which seek to preserve the status quo and to occupy the discursive space that might otherwise be filled by empirical or critical questions about the nature of reality.
In contrast to the Fordist society observed by Gramsci, power now seeks to circumvent the public sphere, in order to avoid the constraints of critical reason. Increasingly, it is non-representational codes—of software, finance, human biology—that mediate between past, present and future, allowing society to cohere. Where, for example, employee engagement cannot be achieved via cultural or psychological means, increasingly business is looking to solutions such as wearable technology, that treat the worker as an item of fixed capital to be monitored physically, rather than human capital to be employed. The key human characteristics are those that are repeated in a quasi-mechanical fashion: footsteps, nightly sleep, respiration, heartbeat. These metronomic qualities of life come to represent each passing moment as yet another one of the same.
Underlying the new neoliberalism’s circumvention of critical forms of knowledge there gapes the truth it is so anxious to avoid—the absence of profitable alternatives to the current, broken model of capitalist accumulation, which it is striving to prop up. Global capitalist development has been confounded by its own success: it has brought about massive over-capacity in manufacturing, with a glut in production driving down profits, combined with a huge over-supply of labour, weakening wages and therefore demand. With only the occasional brief uptick, profitability rates have been falling, business cycle on business cycle, since the end of the trente glorieuses. Underlying this is the drastic failure to achieve a viable and profitable model of capitalism since the demise of Fordist Keynesianism. The once tacit, and now explicit, dependence of the neoliberal model upon the rising indebtedness of public and private sectors has been, as Streeck shows, a forty-year-long exercise in kicking the can down the road. Ultimately, the function of apparently irrational symptoms in today’s neoliberalism is to duck or conceal this realization.
The founding idea of neoliberalism, dating back to the 1920s, is Mises’s argument that there can be no scientific account of human need, but only of consumer preference. Until this dogma is refuted by historical experience, it seems inevitable that resistance and conflict will reverberate around policy issues of disability and healthcare, where the finitude and fallibility of the human body offers the simplest falsification of Mises’s doctrine, while it might yet perhaps contribute to a different hegemony altogether. Neoliberalism has become incredible, but that is partly because it is a system that no longer seeks credibility in the way that hegemonies used to do, through a degree of cultural or normative consensus. Sovereign power has always had a circular logic, exercised to demonstrate that it can be exercised. Yet today, that sovereignty is found in technical and technocratic spheres: policies, punishments, cuts, calculations are simply being repeated, as that is the sole condition of their reality. The coercions of post-2008 policymaking are those of a system in retreat from both the ideology and the reality of rational public dialogue, and the epistemological constraints which that involves. One may offer a detailed economic critique, mobilize the vast mass of the country or sing the Swedish national anthem, scream or lampoon, but all forms of dissent will be treated as equivalent. This, at least, is something that satire can demonstrate.
Comments
Post a Comment